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Whats the practical difference?
by loveistheanswer 6y ago
Whats the practical difference?
- pmontra 6y agoMuch like people countries have to return some money every month. A country can fail to pay a debt on very specific date but pay the debt it has to give back one month later.
- dragonwriter 6y agoUnlike a person—and relevant to repudiation—a sovereign debtor can just say “I’m not paying you and there is no one with the legal power to compel me otherwise”, and can do so even if they are solvent, and the main effect (usually) is it just makes it harder to borrow for a period of time.
- dragonwriter 6y ago> Whats the practical difference? Bankruptcy involves someone else determining the alteration of rights and obligations under an established legal framework. Repudiation of debt is just exercise of sovereign power by the sovereign debtor. (In between the two is non-bankruptcy bailouts, where the debtor isn't the sovereign, but the relief is a specifically targeted exercise of sovereign power rather than an adjudication under a preexisting legal framework.)